Korean power equipment maker BHI targets $747 mn in new orders this year

BHI Co. President and Chief Executive Officer Woo Jong-in [Courtesy of BHI]

BHI Co., a mid-sized power generation equipment manufacturer in South Korea, is expected to win 1 trillion won ($747.3 million) worth of new orders this year, the first since its inception, on the back of high demand at home and abroad, according to its President and Chief Executive Officer Woo Jong-in.

“We won orders worth about 300 billion as of March,” Woo told Maeil Business Newspaper. “We expect this year’s figure to top 1 trillion won when including orders for heat recovery steam generators (HRSG) and nuclear power equipment for liquefied natural gas (LNG) combined cycle power generation in Korea and small engineering, procurement, and construction (EPC) orders overseas including Europe.”

BHI - founded in 1998 - is a company that designs, manufactures, installs, and builds power generation equipment needed for power plants and steelmaking. The company used to be a traditional power generation facility manufacturer that specializes in coal-fired and nuclear power generation but it transformed into a provider of world-class HRSG original technology that matches the level of other global players such as General Electric Co., Siemens AG, and Mitsubishi Power Ltd. after acquiring related technologies from Amec Foster Wheeler Ltd., the world‘s top three power facility company in 2020.

HRSG is a key facility for eco-friendly LNG power generation. It boils water with the heat generated from burning LNG in a gas turbine to create steam. BHI topped the global HRSG market with a 25.6 percent market share in 2021. BHI aims to top the market this year.

According to analysts, BHI faces the best environment for business as the combined cycle power generation market is gaining traction at home and abroad.

The Ministry of Trade, Industry and Energy plans to shift focus from coal-fired power plants to combined cycle power plants and the resumption of nuclear power generation.

Under the ministry’s plan, Korea needs 23.3 gigawatts of LNG power plant capacity by 2036. This means two to three coal-fired power plants will have to be converted to combined cycle power plants every year.

The European Union (EU) also grants conditional tax benefits to LNG power plants and nuclear power projects. BHI supplies both HRSG and auxiliary equipment for combined cycle and nuclear power plants.

BHI is also expected to expand its presence in the Middle East, one of the regions with the world’s biggest water shortages. It needs to procure electricity from relatively inexpensive oil or gas resources by building LNG combined cycle power plants instead of nuclear power plants or coal-fired power plants that require massive cooling water.

The Middle East, in fact, has recently been making aggressive investments in power generation facilities amid rising oil prices.

“We expect to win HRSG orders from major markets such as Saudi Arabia, the United Arab Emirates (UAE), and Kuwait, where construction of large-scale gas-fired power plants is scheduled,” Woo said.

The outlook for the nuclear power plant business is also bright.

Korea Hydro & Nuclear Power Co. signed a 2.9 trillion won contract with Doosan Enerbility last month on the supply of main equipment for Shin Hanul Nuclear Plant Unit 3 and 4. This may mean additional orders for products such as assistive devices this year for BHI as it had supplied auxiliary equipment to Shin Kori Nuclear Power Plant Units 5 and 6. BHI has supplied nuclear auxiliary equipment worth more than 350 billion won so far, the second-largest amount after Doosan Enerability.